Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Q1 2024 Earnings Presentation
32 slides from Western New England Bancorp's earnings presentation, Apr 23, 2024
Slide 1: Investor Presentation 1st Quarter 2024
Local banking is better than ever. INVESTOR PRESENTATION 1ST QUARTER 2024
Slide 2: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS 2 We may, from time to time, make written or oral “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 , including statements contained in our filings with the Securities and Exchange Commission (the “SEC”), our report
Slide 3: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS 3 • changes in business conditions and inflation ; • operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity, technological changes, vendor issues, bus
Slide 4: Who We Are
WHO WE ARE Every day, we focus on showing Westfield Bank customers “ what better banking is all about . ” For us, the idea of better banking starts with putting customers first, while adhering to our core values . Our Core Values : • Integrity • Enhance Shareholder Value • Customer Focus • Community
Slide 5: Senior Management Team
SENIOR MANAGEMENT TEAM James C . Hagan, President & Chief Executive Officer Guida R . Sajdak, Executive Vice President, Chief Financial Officer & Treasurer Allen J . Miles III, Executive Vice President & Chief Lender Officer Kevin C . O’Connor, Executive Vice President & Chief Banking Officer Daniel
Slide 6: 1Q2024 Quarterly Earnings
1Q2024 QUARTERLY EARNINGS 6 1Q2023 2Q2023 (2) 3Q2023 (1) 4Q2023 1Q2024 ($ in thousands , except EPS) $ 18,504 $ 16,846 $ 16,383 $ 16,176 $ 15,346 Net interest income (388) 420 354 486 (550) (R eversal of) provision for credit losses 2,979 1,592 3,612 2,714 2,674 Non - interest income 14,896 14,551 1
Slide 7: Net Interest Income and Net Interest Margin
NET INTEREST INCOME AND NET INTEREST MARGIN 7 $18.5 $16.8 $16.4 $16.2 $15.3 3.14% 2.81% 2.70% 2.64% 2.57% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 Net interest income ($) Net interest margin (%) On a sequen
Slide 8: Total Loans
TOTAL LOANS 8 $1,993 $2,007 $2,007 $2,017 $2,022 4.34% 4.49% 4.66% 4.73% 4.84% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00% 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 $1,900 $1,920 $1,940 $1,960 $1,980 $2,000 $2,020 $2,040 Average Loans Outstanding Average Loans Outstanding Average Loan Yield, Tax-Equivalent Basis $
Slide 9: Commercial and Industrial Loans
COMMERCIAL AND INDUSTRIAL LOANS 9 $218 $227 $213 $217 $207 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 $195 $200 $205 $210 $215 $220 $225 $230 Total commercial and industrial (“C&I”) loans decreased $ 10 . 1 million, or 4 . 7 % , from $ 217 . 4 million at December 31 , 2023 , to $ 207 . 3 million at March 31
Slide 10: Commercial & Industrial Portfolio
COMMERCIAL & INDUSTRIAL PORTFOLIO (1) 10 (1) % of total loans as of March 31, 2024 1.6% , Manufacturing 1.7% , Merchant Wholesalers 0.1% , Hotels 1.1% , Construction, Sand and Gravel Mining 4.2% , Other 0.6% , Healthcare 1.0% , Educational Services
Slide 11: Commercial Real Estate Loans
COMMERCIAL REAL ESTATE LOANS 11 $1,080 $1,075 $1,080 $1,080 $1,084 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 $1,070 $1,072 $1,074 $1,076 $1,078 $1,080 $1,082 $1,084 $1,086 Total commercial real estate (“CRE”) loans increased $ 4 . 2 million, or 0 . 4 % , to $ 1 . 1 billion from December 31 , 2023 to March
Slide 12: Commercial Real Estate Loans and Total Office Portfolio
COMMERCIAL REAL ESTATE LOANS AND TOTAL OFFICE PORTFOLIO 12 (1) As of March 31, 2024 Adult Care/Assisted Living, 1.6% Apartment, 8.3% Auto Sales, 1.9% College/School , 1.2% Hotel, 2.2% Industrial/Warehouse , 9.3% Mixed - Use, 1.5% Office, 11.2% Other , 2.9% Residential Non - Owner , 2.5% Self - Stora
Slide 13: Residential Real Estate Loans and Consumer Loans
RESIDENTIAL REAL ESTATE LOANS AND CONSUMER LOANS 13 $707 $711 $720 $728 $732 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 $690 $695 $700 $705 $710 $715 $720 $725 $730 $735 Residential real estate loans , including home equity loans, and consumer loans increased $ 4 . 1 million , or 0 . 6 % , to $ 731 . 8 mill
Slide 14: Investment Portfolio
INVESTMENT PORTFOLIO 14 The held - to - maturity (“HTM”) and available - for - sale (“AFS”) securities portfolio represented 14 . 1 % of total assets at March 31 , 2024 and December 31 , 2023 , respectively . Unrealized losses from the HTM securities portfolio totaled $ 39 . 6 million . The HTM unre
Slide 15: Total Deposits
TOTAL DEPOSITS 15 $1,699 $1,623 $1,594 $1,532 $1,501 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 $1,400 $1,450 $1,500 $1,550 $1,600 $1,650 $1,700 $1,750 PERIOD - END CORE DEPOSITS At March 31 , 2024 and December 31 , 2023 , total deposits were $ 2 . 1 billion . Core deposits, which the Company defines as all
Slide 16: Average Total Deposits
AVERAGE TOTAL DEPOSITS 16 $1,564 $1,556 $1,559 $1,588 $1,576 $639 $591 $592 $589 $558 0.76% 1.13% 1.42% 1.60% 1.75% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 Average Deposits and Rates Interest-bearing deposits Non-interest-bear
Slide 17: Historical Rate Paid and Betas on Core and Time Deposits
HISTORICAL RATE PAID AND BETAS ON CORE AND TIME DEPOSITS 17 (1) Core deposit beta excludes non - interest bearing accounts. 15% 18% 19% 21% 20% 0.82% 1.00% 1.11% 1.22% 1.21% 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 0% 5% 10% 15% 20% 25% Core Deposit Beta Core Depo
Slide 18: Average Core and Time Deposits
AVERAGE CORE AND TIME DEPOSITS 18 $1,775 $1,645 $1,588 $1,573 $1,506 0.53% 0.64% 0.70% 0.76% 0.76% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 Average Core Deposits and Rates Average core deposits, including non - intere
Slide 19: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 19 93.0% 93.4% 92.6% 94.6% 94.5% 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 92% 92% 93% 93% 94% 94% 95% 95% Period - end Loan - to - Deposit Ratio 79.0% 75.0% 73.2% 71.5% 70.0% 21.0% 25.0% 27.0% 28.5% 30.0% 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% C
Slide 20: Wholesale Funding
WHOLESALE FUNDING 20 $150 $148 $150 $156 $152 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 $- $20 $40 $60 $80 $100 $120 $140 $160 $180 Wholesale Funding (Includes $20 million in Subordinated Debt) The Bank is considered to be well - capitalized as defined by regulators ( see slide 26 ) . The Bank’s Tier 1 Lev
Slide 21: Liquidity Position
21 The Company’s liquidity position remains strong with solid core deposit relationships, cash, unencumbered securities and access to diversified borrowing sources . On March 12 , 2023 , the Federal Reserve made available the BTFP, which enhances the ability of banks to borrow greater amounts agains
Slide 22: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2023. Note: Total number of Westfield Bank branches shown includes the Big E seasonal branch and online deposit channel. Three Wes tfi eld branches are located in Hampshire County, MA and four Westfield branches are located in Hartford County, CT outside
Slide 23: Asset Quality Indicators
ASSET QUALITY INDICATORS 23 1Q2024 4Q2023 3Q2023 2Q2023 1Q2023 $4.7M $6.0M $5.6M $5.4M $3.0M Total delinquent loans 0.23% 0.30% 0.28% 0.27% 0.15% Delinquent loans as a % of total loans $5.8M $6.4M $6.3M $5.8M $5.8M Nonperforming loans (NPL) 0.29% 0.32% 0.31% 0.29% 0.29% NPL as a % of total loans 0.2
Slide 24: Asset Quality
ASSET QUALITY 24 Management continues to remain attentive to any signs of deterioration in borrowers’ financial conditions and is proactive in taking the appropriate steps to mitigate risk . The allowance for credit losses as a percentage of total loans was 0 . 98 % at March 31 , 2024 , compared to
Slide 25: Asset Quality
ASSET QUALITY 25 1Q2024 4Q2023 3Q2023 2Q2023 1Q2023 ($ in Millions) $15.2 $5.8 $12.0 $11.8 $12.8 Special Mention - - - - $ 8.0 Special Mention - Hotel $15.2 $5.8 $12.0 $11.8 $20.8 Total Special Mention 0.8% 0.3% 0.6% 0.6% 1.0% % of Total Loans $21.6 $33.7 $33.6 $37.7 $40.4 Substandard 1.1% 1.7% 1.7%
Slide 26: Capital Management
CAPITAL MANAGEMENT 26 We are well - capitalized with excess capital. Ratio at December 31, 2023 Ratio at March 31, 2024 Consolidated 9.40% 9.54% Leverage Ratio 12.59% 12.62% Common Equity Tier 1 Ratio 12.59% 12.62% Tier 1 Capital Ratio 14.67% 14.67% Total Capital Ratio As of March 31 , 2024 , the Ba
Slide 27: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 27 # of Shares Year 2,189,276 2018 1,938,667 2019 1,391,496 2020 2,758,051 2021 720,975 2022 649,744 2023 200,000 1Q - 2024 Annual Dividends per Share Year $0.16 2018 $0.20 2019 $0.20 2020 $0.20 2021 $0.24 2022 $0.28 2023 $0.07 1Q - 2024 Share Repurchases Dividends On
Slide 28: Capital Management
CAPITAL MANAGEMENT 28 $10.50 $10.60 $10.53 $10.96 $10.90 $9.84 $9.94 $9.87 $10.30 $10.25 Book Value per Share Tangible Book Value per Share (non - GAAP) (1) Book Value Tangible Book Value (non-GAAP) Book value per share decreased $0.06, or 0.5%, from $10.96 at December 31, 2023 to $10.90 at March 31
Slide 29: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 29 Reconciliation of Non - GAAP to GAAP Financial Measures The Company believes that certain non - GAAP financial measures provide information to investors that is useful in understanding i ts financial condition. Because not all companies use the same cal
Slide 30: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 30 Reconciliation of Non - GAAP to GAAP Financial Measures The Company believes that certain non - GAAP financial measures provide information to investors that is useful in understanding i ts financial condition. Because not all companies use the same cal
Slide 31: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 31 Reconciliation of Non - GAAP to GAAP Financial Measures The Company believes that certain non - GAAP financial measures provide information to investors that is useful in understanding i ts financial condition. Because not all companies use the same cal
Slide 32: Westfield Bank: What Better Banking's All About
WESTFIELD BANK “WHAT BETTER BANKING’S ALL ABOUT” James C. Hagan , President and Chief Executive Officer Guida R. Sajdak , Executive Vice President and Chief Financial Officer Meghan Hibner , First Vice President and Investor Relations Officer 32 141 Elm Street, Westfield, MA
Western New England Bancorp — Q1 2024 Earnings Presentation on 6ix